Insurers add voices to a noisy debate

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For months, the question on Capitol Hill has been: What will the insurance companies do?

Health care advocates still smarting over the industry’s “ Harry and Louise” ads against reform in the 1990s have worried what the insurers will do this time. So far, the industry has stayed at the bargaining table and held its fire in the ad wars.

But now, the industry is speaking up, not with an attack but with a seven-figure, national cable TV ad buy starting Monday in favor of affordable bipartisan health reform that can cover everyone. But make no mistake: The ads are sending a strong don’t-tread-on-us message, not so much a shot across the bow of reform as a reminder of the industry’s ability to weigh in at any time, with messages pro or con.

It’s just the latest sign that the health care debate is about to get a lot noisier as groups decide they can no longer stay on the sidelines — complicating congressional negotiations right at the very moment when President Barack Obama’s hopes of getting a bill this year are in gravest doubt.

With a growing sense on Capitol Hill that the next three weeks could be critical to health reform’s prospects this year, the groups don’t want to risk missing a chance to shape the legislation as Congress rushes toward its August recess.

So they’re all getting in. The insurers, pro-reform liberals and the Democratic Party are launching ads now. The U.S. Chamber of Commerce and other business groups have been stepping up their critiques of legislation. Strange-bedfellows coalitions of labor and business have started to splinter, with each side going its own way, particularly when it comes to legislation in the House.

And GOP Chairman Michael Steele is giving a speech Monday at the National Press Club where he’ll lay out the Republican case against an Obama-style overhaul of the health system.

This new spurt of activity comes ahead of a week that is shaping up to be the hardest fought in an already brutal month. Democrats are still reeling from the congressional budget umpire’s declarationthat their reform plans do nothing to control costs — undercutting one of Obama’s central sales pitches to get an overhaul done this year.

Obama administration officials spent Sunday on the defensive, insisting that a Congressional Budget Office report on the House health bill was wrong and saying that an August goal for passing bills in both chambers was still within reach, despite growing evidence the Senate simply can’t get it done.

In fact, neither Obama nor Senate Majority Leader Harry Reid (D-Nev.) mentioned August in statements Friday, a signal that even the White House is backing off its original hard-and-fast deadline.

Obama’s budget director, Peter Orszag, sounded less than emphatic about the chances both houses will pass bills by August. “That is the goal,” Orszag said on “Fox News Sunday.” Asked whether that goal would be met, he said somewhat meekly, “I think the chances are high.”

Also, congressional auditors late Friday reported that the House Democratic legislation would add more than $230 billion to the federal deficit over the next 10 years — which undercut a second central tenet of Obama’s vision, that the plans would not add to the federal deficit.

Orszag stressed the CBO numbers are only so high because the estimates keep current Medicare reimbursements to doctors in place. “If you take that off the table in terms of new policy, the House bill is deficit-neutral,” he said.

Still, House Democratic leaders are facing a showdown with their party’s cost-conscious moderates, and the Senate is still waiting for a group of bipartisan negotiators to introduce legislation that pays for reform.

Even as Obama holds out hope for GOP votes, Senate Minority Leader Mitch McConnell of Kentucky said it was unlikely the president would get Republican support. “This is a bill that shouldn’t pass at any point either before the August recess or earlier in the year,” he said on NBC’s “Meet The Press.” “It’s not good for the country.”

The early half of the week should determine whether the Senate has any shot of meeting the August deadline.

The bipartisan group of Finance Committee senators is expected to reconvene their talks Monday after taking a three-day break as their staffs worked through the weekend.

They continue to struggle over finding a way to pay for the bill. They need to fill a $320 billion budget hole, which opened after the congressional Democratic leadership ruled out taxing health benefits.

The group is moving toward a few options, such as capping the deduction on flexible spending accounts, changing corporate reporting requirements as a way to gain more tax revenue and assessing a fee on the pharmaceutical industry. They are also trying to wring more savings out of the bill to compensate for the gap.

But these items still leave a substantial gap to fill — as much as $160 billion, according to one source familiar with the negotiations.

Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Kent Conrad (D-N.D.) also might attempt to reinsert taxing health benefits back into the debate — less than two weeks after Reid and other Senate Democratic leaders declared it off-limits as a revenue option.

If the idea picks up speed again, look for the unions to weigh back in. The Laborers’ International Union of North America was out front in opposition to the tax, running ads against lawmakers who support it.

But members of Congress aren’t the only ones who want to get their voices heard this week. The new 30-second spot by America’s Health Insurance Plans pushes for bipartisan reform that includes affordable, universal coverage that doesn’t deny insurance to those with pre-existing health conditions.

“Illness doesn’t care where you live or if you’re already sick or if you lose your job. Your health insurance shouldn’t either. So let’s fix health care. If everyone’s covered, we can make health care as affordable as possible. And the words ‘pre-existing condition’ become a thing of the past,” the ad says.

The ad doesn’t attack the idea of a government-run insurance plan — a proposal the industry vehemently opposes — but is a reminder of the industry’s reach and potential to weigh in on the debate.

“There’s one thing that this industry knows how to do and that’s to engage, mobilize and lobby,” said an insurance industry lobbyist. “This is an industry that has the capacity to send messages from positive to negative and has no problem doing it.”

The television ad, which could also run in targeted markets, will be supported by a complementary print campaign that is also set to launch this week. AHIP’s ad campaign marks a new chapter in the debate. The generic messages supporting reform by myriad coalitions are decreasing as groups, while still generally supportive, are taking issue with specific provisions.

For instance, AARP, the National Federation of Independent Business, Service Employees International Union and the Business Roundtable formed a coalition that spent months and millions of dollars prodding Congress to reform the health care system.

When the House introduced its bill last week, AARP and SEIU supported it, NFIB opposed it and the Roundtable signed on to a letter that expressed serious concerns about it. It seems the coalition, called Divided We Fail, has been, in fact, divided.

PhRMA, the drug industry’s trade group, split the difference. It came out against the House bill but partnered with the consumer group Families USA to launch a $4 million, pro-reform ad campaign this weekend.

The ad reprises the characters Harry and Louise. The irony? Fifteen years ago, the insurance industry used the fictional couple’s kitchen-table gripes in ads that were credited with torpedoing health care reform.